Kerala-based Chemmanur International Jewellers, which has Boby Devassikutty as its chairman, has come under Income Tax department’s scanner for allegedly collecting deposits from people without licence from RBI and SEBI. A series of searches at the group’s offices over the past few weeks revealed that the deposits are engaged in a risk-ridden money chain model of business activity, sources have said.

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Following the searches, the Income Tax Department has served notices to hundreds of depositors across the state, asking them to explain their source of income and pay tax and penalty.

According to sources, the department has so far identified 3,000-odd investors who had made deposits ranging from Rs 10 lakh to Rs 3 crore with the jeweller.

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“The Income Tax Department has collected evidence that suggest that unaccounted money went into the deposits, which were collected under a scheme offering 13 per cent interest. A major chunk of deposits were accepted in cash and the entire operation was kept away from the income tax purview. Notices have been sent to the depositors.

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Those who could not explain their source of income have been asked to pay tax and penalty,’’ a source said.

Sources said Chemmanur, like other gold firms, collected money as advance for buying ornaments. The group sells gold ornaments as per that scheme. But it has a deposit scheme offering unusually high rate of interest. Under that, Chemmanur allegedly collected Rs 454 crore (as on March, 2015) without any licence to do so.

Boby Devassikutty, chairman of the Thrissur-based jeweller, hit headlines in 2012 when he made Diego Maradona the brand ambassador of the firm. In 2014, Boby took part in a run across Kerala to spread the message of blood donation. The group has credits and investment division, chit fund and retail outlets of gold ornaments.

Reacting to the ongoing probe, Boby said, “All gold firms in Kerala are collecting advances and we are doing the same. Sometimes, black money might have got involved in the deposits. I don’t know why the Income Tax Department is after us. We have explained everything. Their attempt would create panic among the investors.’’

However, sources said only Chemmanur group is engaged in collecting deposits, which is different from gold purchase schemes of other jewellers.

Sources said investigation into the group’s accounts had revealed that fresh flow of deposits was used to meet the payment liability towards earlier investors. “The deposits are being circulated in a money chain model. One person’s deposit is used to pay another person,’’ sources said.

Sources said a case against the company was pending in Mumbai. In 2012, the economic crime branch wing of Mumbai police registered a case against Boby and others on charges of accepting investment without any licence.
The case was lodged as per Sections 420 and 34 of IPC with Sections 3 and 4 of the Price Cheat and Money Circulation Banning Act.

A few months back, Kerala Opposition leader V S Achuthanandan had alleged that Chemmanur group had collected crores from investors in violation of SEBI and RBI norms. He had alleged that a financial fraud of Rs 2,000 crore had taken place in the company and the government had failed to take action against the firm.